Parrish et al v. National Football League Players Incorporated

Filing 548

Letter Brief -- Letter from L. Peter Parcher to Judge Alsup filed byBernard Paul Parrish, Walter Roberts, III, Herbert Anthony Adderley. (Attachments: # 1 Exhibit A to Letter from L. Peter Parcher to Judge Alsup)(Katz, Ronald) (Filed on 11/6/2008)

Exhibit A

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AND PI TAKE OUT 63 TO 69 PERCENT, YOU'RE AWARE THAT THEY DO THAT, RIGHT? A. YES. OKAY. THAT IS NOT -- NOTHING WOULD PREVENT THEM FROM IN OTHER WORDS, THAT'S A POLICY

Q.

DOING SOMETHING DIFFERENT.

DECISION THAT THEY'VE MADE, CORRECT? A. IT IS A POLICY DECISION BY THE NFLPA HOW TO DIVIDE THE

REVENUES FROM LICENSING THAT GO INTO THE GROUP LICENSING EQUAL SHARE POOL.

Q.

NOW, LET'S GO BACK TO THIS CONCEPT -- AND I'LL TRY TO END

WITH THIS -- THAT THE NFLPA HAS MARKET POWER OVER ACTIVE PLAYER LICENSING. A. YES. ALL RIGHT. NOW, WAS THERE ANYTHING TO PREVENT THE NFLPA DO YOU RECALL WE WERE TALKING ABOUT BEFORE?

Q·

FROM USING THE LEVERAGE THEY HAD AS A RESULT OF THAT MARKET POWER TO ATTEMPT TO HAVE LICENSEES TAKE THE RIGHTS FOR THE GLA RETIRED CLASS MEMBERS? A. MARKET POWER OVER THE RETIRED PLAYERS? NO, SIR. LET ME GIVE YOU THIS HYPOTHETICAL. LET'S ASSUME

Q.

EA HYPOTHETICALLY COMES TO THE NFLPA AND SAYS: "WE WANT A LICENSE TO ALL ACTIVE PLAYERS," RIGHT? A. WHERE ELSE CAN THEY GO FOR THAT?

IF THEY WANT TO DO A GROUP LICENSE FOR A SINGLE PRODUCT,

THEY HAVE TO GO TO NFLPI. SO NFLPI HAS LEVERAGE OVER THEM. THEY HAVE TO COME TO

2511Q.

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THEM, RIGHT? A. THAT. Q. I COULD, TOO. BUT, THEORETICALLY, EA DID COME TO THEM, WELL, I CAN THINK OF A WAY IN WHICH THEY COULD GET AROUND

RIGHT? A. THEY DID COME TO THEM, BUT THAT DOESN'T PROVE THEY HAVE

MARKET POWER, BECAUSE I CAN THINK OF AN OBVIOUS WAY TO GET AROUND THAT. Q. A. WHAT'S THAT? THE OBVIOUS WAY IS THE EXACT SAME WAY THEY DO IT WITH

HISTORICAL TEAMS, WHICH IS MAKE A LICENSE WITH THE NFL FOR USE OF THE TEAM LOGOS; SIGN INDIVIDUAL LICENSES WITH THREE OR FOUR STAR PLAYERS ON EACH TEAM; AND SCRAMBLE EVERYBODY ELSE. AND THEN, THEY DON'T HAVE TO DEAL WITH PLAYERS INC OR THE NFLPA. Q. A. AND YOU THINK THAT WOULD HAVE BEEN RATIONAL FOR EA TO DO? I DON'T KNOW. I DON'T RUN EA. BUT THE ISSUE OF MARKET POWER IS ABOUT WHAT THE SUBSTITUTES ARE.

Q.
A.

RIGHT. AND AT SOME PRICE THAT PI WOULD CHARGE, IT WOULD BE

SUFFICIENTLY HIGH THAT IT WOULD BE CHEAPER TO DO IT THE OTHER WAY. I HAVEN'T STUDIED THE ISSUE, NOR HAS DR. RASCHER, OF WHETHER INDIVIDUAL LICENSES ARE IN THE SAME RELEVANT MARKET AS GROUP LICENSES. BUT I'VE RAISED THE ISSUE FOR YOU THAT

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SOMEBODY WOULD HAVE TO STUDY IN ORDER TO REACH THE CONCLUSION THAT THEY HAD MARKET POWER OVER ON -- ON THE LICENSING OF ACTIVE PLAYERS.

Q.

WHAT WOULD IT INDICATE TO YOU THAT EA, WHEN THEY WERE

OBTAINING A NON-EXCLUSIVE LICENSE TO GROUP PLAYER RIGHTS FROM THE NFLPA, PAID THEM $500,000 A YEAR, AND WHEN THEY GOT AN EXCLUSIVE LICENSE TO THAT SAME GROUP THEY PAID THEM $25 MILLION A YEAR?

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A.

WHAT THEY WERE BUYING WAS A MONOPOLY IN THE MARKET FOR

VIDEO GAMES INVOLVING NFL TEAMS. THAT'S WHY THEY PAID MORE FOR IT. Q. AND WAS THERE ANYTHING TO PREVENT -- GIVEN THE VALUE THAT

THEY WERE GOING TO PLACE ON THAT RIGHT TO HAVE A MONOPOLY, WAS THERE ANYTHING TO PREVENT THEM FROM USING THE NFLPA'S POWER IN CONNECTION WITH HAVING ALL THOSE ACTIVE PLAYERS UNDER LICENSE TO SAY: "HEY, TAKE OUR GUYS. TAKE THE GLA'S GUYS"? MR. KESSLER : YOUR HONOR, I'M GOING TO OBJECT. THIS

HAS ANYTHING TO DO WITH THE GLA IN THIS CASE. THIS IS NOW ARGUMENT OF COUNSEL ABOUT ISSUES THAT ARE SO FAR AFIELD, YOUR HONOR, AND I WOULD OBJECT. BY MR . Q. HUMMEL:

THAT'S WHAT DR. RASCHER MEANT BY LEVERAGING, SIR. THE COURT : OVERRULED. IF YOU UNDERSTAND THE

QUESTION, PLEASE ANSWER.

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ASKING IS:

THE WITNESS :

I HAVE NO IDEA HOW YOU CAN GET FROM THE

GLA'S THAT DIDN'T COVER MOST OF THE STAR PLAYERS, TO THE NOTION THAT NFLPI WAS EXERCISING SOME SORT OF MARKET POWER IN THE MARKET FOR RETIRED PLAYER RIGHTS. THE COURT :. THAT'S NOT QUITE COUNSEL'S QUESTION.

HE'S ASKING THIS QUESTION. THE WITNESS: THE COURT : OKAY. WHAT WOULD HAVE BEEN THE OUTCOME IF

PLAYERS INC HAD SAID TO EA: "YOU'RE NOT GOING TO GET EVEN OUR ACTIVE PLAYERS UNLESS YOU TAKE ALL THE GLA RETIRED PLAYERS." OR, FIRST, COULD THEY HAVE SAID THAT? THE WITNESS : WHETHER THAT WOULD BE -THE COURT : SKIP IT. WE'RE TALKING ABOUT AS AN WELL, LET ME SKIP THE LEGAL ISSUE ABOUT

ECONOMIC MATTER, COULDN'T PI HAVE DONE THAT? THE WITNESS : IN PRINCIPLE, THEY COULD HAVE SAID IT.

WHETHER IT WOULD BE HAVE BEEN EFFECTIVE AND WHETHER IT WOULD HAVE CAUSED ALL THE RETIRED PLAYERS' IMAGES TO ACTUALLY -THE COURT : THE WITNESS : NO, JUST THE GLA RETIRED PLAYERS. THAT'S WHAT I MEANT. I SAID THAT IF

THEY HAD DONE IT, WOULD IT HAVE LED TO AN AGREEMENT IN WHICH ALL THE GLA RETIRED PLAYER IMAGES WERE ACTUALLY ACQUIRED. THE COURT : THE FIRST QUESTION I THINK COUNSEL WAS

COULD, AS A MATTER OF ECONOMICS, PI COULD HAVE

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TRIED TO SAY: "NO GLA RETIRED PLAYERS, IF YOU DON'T WANT TO TAKE THEM, THEN YOU'RE NOT GOING TO GET THE ACTIVE PLAYERS, EITHER." THEY COULD HAVE SAID THAT. THE WITNESS : THAT, YES. THE COURT : ALL RIGHT. NOW, DO YOU HAVE AN OPINION THEY, IN PRINCIPLE, COULD HAVE SAID

AS TO WHAT WOULD HAVE HAPPENED IN THE EVENT THAT PI HAD TAKEN THAT TACT? THE WITNESS : RESISTED IT. WELL, I'M SURE THAT EA WOULD HAVE

BUT THE ISSUE WOULD ALL TURN ON PRICE, RIGHT? IT

WOULD TURN ON WHETHER THE LICENSE FEE WOULD HAVE BEEN SUBSTANTIALLY HIGHER THAN THE CURRENT SUM OF THE ACTIVE PLAYER PLUS RETIRED PLAYER LICENSE FEES THAT EA IS ALREADY PAYING. AND MY EXPECTATION IS THAT THAT SUM OF LICENSE FEES WOULDN'T HAVE BEEN ANY DIFFERENT. MR. KESSLER : THE COURT : JURY. YOUR HONOR -NOW, I WANT TO SAY ONE ADMONITION TO THE

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THAT WAS THE QUESTION THAT COUNSEL, I THINK, WAS TRYING

TO ASK. IN MY TRYING TO MAKE -- SPEED THIS ALONG, I DON'T WANT THERE TO BE ANY SUGGESTION IN MY QUESTION THAT PI HAD A.DUTY TO DO SUCH A THING. THAT'S GOING TO BE FOR YOU TO DECIDE. BUT THAT WAS THE PURPORT OF HIS QUESTION. AND IT SEEMED TO ME THAT WE

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WEREN'T GETTING A CLEAR-CUT ANSWER. YES, MR. -MR. KESSLER : YOUR HONOR, I MUST ASK FOR THE COURT'S

INSTRUCTION BECAUSE OF THE LEGAL ISSUE RAISED TO TYING ONE PRODUCT TO ANOTHER COULD VERY WELL BE ILLEGAL TYING. AND SO

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IT'S BEEN NOW SUGGESTED AND INJECTED INTO THIS CASE THAT WHETHER OR NOT PLAYERS ASSOCIATION SHOULD HAVE DONE SOMETHING, YOUR HONOR, THAT IT VERY WELL MAY HAVE BEEN CONTENDED BY EA TO BE A LEGAL TYING. I THINK YOU HAVE TO EXPLAIN TO THE JURY THAT IT'S VERY UNCLEAR THAT THERE WAS ANY LEGAL ABILITY FOR THE NFLPA OR PI EVEN TO MAKE SUCH A REQUEST OF THE -THE COURT : I DON'T KNOW IF THAT'S CLEAR OR NOT. WE

CAN CLEAR THAT UP IN ANY INSTRUCTIONS AT THE END. WHAT I WILL SAY TO THE JURY RIGHT NOW IS THAT I'M NOT SUGGESTING IN ANY WAY THAT PI HAD SUCH A DUTY TO MAKE SUCH A TIE-IN, IF IT IS A TIE-IN. THAT WAS THE QUESTION COUNSEL WAS ASKING, AND WE WERE BEATING AROUND THE BUSH AND NOT GETTING TO AN ANSWER. ALL RIGHT. MR. HUMMEL : ARE WE DONE? I HAVE ONE MORE QUESTION THAT HAS TO DO

WITH TIE-IN, JUST SO WE'RE CLEAR FROM A STANFORD ECONOMIST WHO UNDERSTANDS, I THINK, ANTITRUST LAW AT LEAST, AND HOW IT APPLIES IN ECONOMICS. BY MR . HUMMEL:

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A TIE ONLY EXISTS WHEN THERE'S A COERCED SALE, RIGHT?.

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A.

A TIE IS LIKE -- "COERCE" MEANS YOU HAVE NO ALTERNATIVE.

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YOU HAVE TO TAKE BOTH OR NOTHING.

Q.
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A.

RIGHT. AND IF -- I THOUGHT YOUR QUESTION -- THE REASON I SAID

"ILLEGAL" TO BEGIN WITH Q. A. SURE. -- I THOUGHT YOU WERE ASKING ME: SUPPOSE THEY HAD A MONOPOLY IN THE ACTIVE PLAYER LICENSING MARKET, AND THEY TRIED TO TIE THAT TO A MARKET IN WHICH THEY DIDN'T HAVE A MONOPOLY, WHICH IS LICENSES FOR RETIRED PLAYERS, AND INSIST THAT EA, IN FACT, LICENSE BOTH. THEY LICENSE THE PRODUCT IN WHICH THEY DIDN'T HAVE A MONOPOLY IN ORDER TO GET ACCESS TO THE ONE IN WHICH THEY DID HAVE A MONOPOLY. I THOUGHT THAT'S WHAT YOUR QUESTION WAS ASKING ME. AND THAT'S WHY I WAS RELUCTANT TO SAY: OH, YEAH, THEY COULD HAVE DONE THAT, BECAUSE I THINK THAT'S PROBABLY ILLEGAL.

Q.

WELL, YOU DO? BUT DOESN'T THAT DEPEND ON WHETHER THERE

ARE TWO PRODUCTS OR ONE? A. Q. A. Q. EXACTLY. RIGHT. IT DEPENDS. SO IF AS AN ECONOMIST YOU WERE TO CONCLUDE THAT THIS IS

ONE PRODUCT, THIS IS THE SINGLE PRODUCT LICENSED BY THIS UNION,